THANKS TO EVERYONE for their well-wishes over the last week. Baby's doing fine, although I suspect my son detected a "disturbance in the force" last night (i.e., dad needs to go to work in the morning) and decided to grunt and complain until 3:30 AM. Couple this with the fact that I also installed close to 750 square feet of decking over the weekend, and you have a recipe for sheer and utter exhaustion (my wife said this morning that I sound like a highly-caffeinated cross between Ben Stein and Homer Simpson)

Oddly enough, with the fatigue and 3 hours of sleep, all these office actions and court documents seem to make more sense to me right now . . .

NOKIA ANNOUNCES IT'LL PLAY NICE WITH ITS LINUX PATENTS: Last year, IBM took a step forward in cooperation with the free software community, by offering blanket licences for 500 of its patents to all free software developers. In January it was Sun's turn, where the world was reminded that Solaris was still free software (although Sun made it look like it was authorizing free software developers to practice thousands of software patents).

This week it was Nokia's turn. Nokia announced it would not use its patents to attack the developers of one specific free software project: the kernel Linux, developed by Linus Torvalds and others, which is most prominently used as the kernel of the GNU/Linux operating system.

However, the Free Software Directory lists over 4000 free software packages. Nokia's announcement says nothing about them, so they still face the potential threat of being attacked by Nokia in the future.

Linux developers are not happy.

UKPTO TRIES TO FIGURE OUT "TECHNICAL CONTRIBUTION", TO NO AVAIL: The UKPTO recently held a number of workshops on software patenting in the EU, with a particular focus on defining "technical contribution" for patentable claims (the report may be found here).

Attendees were given the opportunity to suggest their own definitions of "Technical Contribution". This resulted in some 208 responses including a number which appeared to reflect general opinions about the Directive at large, rather than focussing on the question at issue. To keep the number of definitions to a manageable number, 11 were selected for testing in the workshops. These reflected the most popular and were representative of a wide range of views. The responses selected included a definition provided by the Foundation for a Free Information Infrastructure (FFII). The definitions included:

Definition A: "Technical Contribution" means a contribution to the state of the art in a field of technology which is new and not obvious to a person skilled in the art. The technical contribution shall be assessed by consideration of the difference between the state of the art and the scope of the patent claim considered as a whole, which must comprise technical features, irrespective of whether or not these are accompanied by non-technical features.

Definition B: "Technical Contribution" means a contribution made by a claimed invention, considered as a whole, to the state of the art in a field of technology. "Technical" means belonging to a field of technology. New teaching about the use of controllable forces of nature under the control of a computer program, beyond the implementation of the data processing procedure itself, is technical. The processing, handling, representation and presentation of information by a computer program is not technical, even where technical devices are employed for such purposes.

These were the two more popular definitions, and as you may have already guessed, the definitions confuse the issue more than they define. In fact, the conclusion from the 13 workshops, which were attended by more than 300 people, was that the definition of technical contribution in the directive is "ambiguous and too liberal", the UKPO said.

The attendees of the workshop discussed in groups a number of fictional patent claims and assessed whether various definitions of technical contribution would allow these patents to be passed. Of the nine fictitious case studies the UKPO said should not have been patentable, four were let through by the directive's definition and only two were disallowed, with the remaining three leaving the workshop attendees unsure, according to the results on the UKPO website.

Steve Probert, deputy director at UKPO, admitted that a better definition may be found by modifying the current definition but said the UKPO cannot change the UK's political policy on this.

NO, BLOGGER ISN'T ACTING UP AGAIN - Apologies to all for not posting over the last few days, but I have a rather pressing matter that I am taking care of this week - namely, the birth of my son, who was born on May 21st. Mom and baby are healthy, all the grandparents are giddy, and yours truly is looking for a quiet corner to curl into and take a long-needed nap.

I'll try to get some posts in over the next few days, but the regular posts won't start again until after Memorial Day.

BIG WEEK FOR PATENT LITIGATION - quite a few high-profile litigations flamed up this week, including CSIRO's WLAN patent, Microsoft's Excel patent, and Broadcom's recent complaint of infringement filed against Qualcomm in the district court and in the ITC. Pretty heavyweight stuff. I don't know how true this is, but one individual I talk to about these things thinks that spring/summer is "prime suin' time" for many companies. He couldn't give me any specific reasons for this conclusion (one theory was that the middle of a fiscal year is a decent time to determine if you have the resources to pick fights like this), but it would be interesting to obtain empirical data to see what time of year invites the largest number of lawsuits.

UK PATENT OFFICE MULLS ARBITRATION PROGRAM AS ALTERNATIVE TO LITIGATION: The UK Patent Office yesterday launched a consultation on its proposals to implement new powers, granted under the recent Patents Act, which will allow it to give non-binding opinions on patent validity and infringement.

This new service is intended to help parties test the strength of their arguments at the Patent Office before (or instead of) resorting to expensive litigation. It is hoped that such a service will encourage parties to settle their dispute promptly.

“By giving non-binding opinions on validity and infringement, the Office will be able to play a new and helpful role in resolving disputes over patents,” said Ron Marchant, Chief Executive of the Patent Office.

“It’s important that we hear from users how they think the new service should operate in detail. This will help us ensure that it fully achieves its aims – and so provides a quick, accessible and balanced procedure for assessing the key issues in a dispute over validity or infringement," he added.

- This is a great idea, and is worth a second look. But aside from validity issues (i.e., reexamination) this type of arrangement may be impossible to set up in the USPTO for infringement. Do YOU want to pay for experts, fees, discovery (albeit limited), only to end up with a non-binding opinion? I don't know many people that would . . .

TT EXTRACTS SETTLEMENT FROM PATSYSTEMS: Electronic screen dealing firm Patsystems has agreed to settle a patent infringement lawsuit brought by Chicago rival Trading Technologies.

The suit was filed yesterday in the United States District Court by TT, alleging that Patsystems has infringed certain of TT's patents.

In a brief statement, Patsystems says the lawsuit will be disposed of once the settlement has been approved by the Court.

Patsystems is the sixth firm to be accused of patent infringement by TT. The Chicago firm has claims outstanding against UK hedge fund manager Man Group, futures commission merchant Refco and bond trading network eSpeed. Chicago brokers Kingstree Trading and Goldenberg Hehmeyer both agreed an out-of-court settlement with TT within days of being sued by the vendor last year.

THE EU CONTINUES ITS PATH TO THE STONE AGE: The European parliament has renewed it opposition to the software patents directive, by making substantial alterations to the draft.

A report on the amended directive, penned by the bill's rapporteur, Michel Rocard, discloses that software would only be patentable if it controlled a physical process, or a controllable force of nature (welcome to 1984!). Patents would not be allowed for software that handles "the treatment, the manipulation, the representation and the presentation of information".

In normal circumstances, parliament would be restricted to introducing changes it proposed during the first reading. However, because the readings have crossed two presidencies, this requirement has been waived.

Unsurprisingly, the representatives of big business are not happy. Mark MacGann, president of Eicta told the FT: "This proposal would eliminate much of the patent protection accessible today by the industry in Europe. It goes against the fundamentals of existing patent law in Europe. Patents based on data processing would no longer be enforceable."

To pass these changes at the plenary vote in July, Parliament must accept them by an absolute majority. Anti-patent campaigners are concerned that this will make it difficult for the amendments to move forward.

One can only hope . . .

TOUGH CROWD . . . Dan Crevier is one of the co-inventors on US Patent 6,895,426 , titled "Addresses as objects for email messages." He was pretty happy to announce that his patent issued yesterday, and posted it on his blog. Trouble is, he is currently one of the architects on Longhorn as part of the ConnectUX team for Microsoft.

Microsoft.

Publicly disclosing that you work for Microsoft is the equivalent of admitting that you are a child molester to the Slashdot crowd. Accordingly, his blog became swamped with snide comments and half-hearted "congratulations" on his otherwise notable accomplishment. Predictably, he had to shut down the thread.

There's just no pleasing some people . . .

BLAME AUSTRALIA! (A.K.A. ATTACK OF THE BIG 5): Apple has joined Microsoft, Dell, Hewlett Packard, Intel and Netgear in a fight to break the U.S. patents on wireless technology held by Commonwealth Scientific and Industrial Research Organisation (CSIRO), which is an arm of the Austrailian government. CSIRO received US Patent 5,487,069, which claimed wireless LAN technology in 1996. The application was filed in November 1993 and claims AU priority to 1992. It turns out that the features claimed in this patent have become standards on notebook computers and other devices. This means that any company creating and selling Wi-Fi devices, such as Apple's AirPort Extreme, must pay CSIRO royalties on the revenue.

In February, CSIRO initiated a court case against the Japanese company Buffalo Technology, which had stopped paying the licensing fees for the technology. Now Apple and the five other companies want a judge to rule that CSIRO's patent is invalid and that none of them are in violation of it.

Can YOU say "battle royale"? Get out your WWF masks for this one . . .

FIRST KRAFT, NOW RIM: Ah, the smell of hiring! Shortly after Kraft announced their mass hiring of patent attorneys, Research In Motion (RIM) has put the call out for patent lawyers and patent agents to work in its Canadian and U.S. offices. In fact, RIM wants seven of 'em. This comes after, though not, unfortunately, before the Waterloo, Ont.-based outfit capitulated and paid out a big chunk of change -- $450-million -- to settle a long and extremely tiresome patent infringement lawsuit in the United States last March. The dispute over patents associated with RIM wireless technology has had a deleterious effect on its expansion into the U.S. market and its stock price (proof: the day RIM announced it had solved one of the U.S. five patent fights it has going on, the stock price jumped 20 per cent). The RIM seven, when hired, will have to sort out the other four.

COURT ISSUES STAY IN EBAY PATENT LITIGATION: Two years ago, a jury declared eBay had willfully infringed MercExchange's consignment fixed-price and software search agent patents, and eBay appealed. In March of this year, the U.S. Court of Appeals for the Federal Circuit ruled on the appeal and readied to send the case back to the lower court, paving the way for the lower court to possibly grant an injunction against eBay. But the Appeals Court granted a stay on May 11 until the Supreme Court rules on eBay's request to hear the case.

eBay said in a press release it intends to ask the Supreme Court to review aspects of the decision regarding MercExchange's consignment patent. It did not get specific about the basis for a Supreme Court hearing.

TOSHIBA AND MICROSOFT COZY UP: Toshiba and Microsoft have signed a patent cross-licensing deal enabling the two companies to use each other's patents freely in the computer and audiovisual equipment sectors.

The patents include those related to software technology in the two areas, according to a Toshiba spokeswoman.

With growth in its traditional PC centric market slowing, Microsoft is boosting its efforts to gain a presence in the newer digital consumer electronics arena, which is led by Asian companies like Sony and Samsung.

TRADING TECHNOLOGY EU PATENTS: I received a question recently regarding TT's EU patent portfolio, and in particular the comments of Steve Borsand during an interview with "Futures & Options Week" magazine (UK). Of particular interest was Steve's repeated denial during the interview that TT's patents were "business method patents":

Q: Some claim that TT's patents will not hold up in Europe because business method patents are not permitted there and because of Espeed's argument that there was a prior use of the invention before the patents were filed. What are your views on that?

A: The patents are, in fact, not business method patents. Business method patents cover a way of carrying out a business process, such as a way of processing a loan or a particular trading strategy. TT’s patents cover a tool or device used for order entry, not a business process. The commercial embodiment of the device happens to be implemented in software. The fact that the patents do not relate to business methods is evidenced by the patents TT obtained in Europe, where business method patents are not permitted.

- - - - - - - - -

[responding to a question regarding USPTO examination]

The criticism has more merit for patent applications that truly relate to business methods. An example of that would be a patent directed to a business process. As I mentioned before, TT’s patents are not business method patents.

I got a good chuckle out of that. First and foremost, the interview was done in conjunction with litigation currently pending between TT and just about the entire trading community in the US. Also, it is no great secret that TT is casting askew glances overseas to establish new licensing opportunities, particularly in the EU. Steve's a smart guy (I've heard him speak at a conference here in Chicago) - this interview was nothing more than the equivalent of an "Entertainment Tonight" or "Access Hollywood" type interview, where hunks and starlets wax eloquent on how "great" their lives and careers are, and all the new and wonderful projects they will be undertaking in the future. Steve knows that every opposing counsel will be watching his every word to try and catch him in an admission to use against him in court. As such, he's putting as much spin as possible on the TT portfolio for the interview.

Now, regarding the "business method" comment - he's splitting hairs, and he knows it. It is absolutely true that business method patents per se are not allowable in the EU. However, 99.99% of patent applicants almost never claim a bald business method, since everyone conducts business via computers nowadays. Accordingly, disclosures will invariably recite an "interface" or "computing process" or "automated system" (you get the idea) that essentially performs the business method, and effectively cloaking the method in "technical" language (anyone that drafted patents prior to State Street knows that old trick). Fortunately for Steve, the US, while allowing "pure" business methods, has never actually defined what a business method actually is (even the congressional record for the 1999 AIPA is silent there), so technically he's correct. And the EU Patent Office is still in flux on determining what a "technical effect" is, so that provides him with lots of wiggle room to pitch his applications.

But I don't think Steve's comments are intended for a US audience, but rather for the EU community. He knows that the EU Patent Office will jump all over TT's European patent applications like a monkey on a cupcake if they conclude that the claims are indeed "business methods." Take, for instance, this claim in this UK application:

1. A method of displaying market information relating to a commodity being traded in a market on an electronic exchange having an inside market with a highest bid price and a lowest ask price using a graphical user interface, the method comprising:

dynamically displaying a first indicator in relation to a first price level on a common price axis, the first indicator being associated with the highest bid price available in the market;

dynamically displaying a second indicator in relation to a second price level on the common price axis, the second indicator being associated with the lowest ask price available in the market; and

displaying an order entry region comprising a plurality of locations, each location being associated with a different price level on the common price axis and each location being arranged to receive a command to send an order to the electronic exchange at the associated price level;

wherein at least one of the first and second indicators moves relative to
the common price axis when the inside market changes.

Not a business method, eh? If you really wanted to put him on the spot, I would have asked the following questions:

(1) "Why would one skilled in the art NOT consider this a business method? What is your reasoning for this?"

(2) "Should financial processes conducted via computers EVER be considered business methods? Why or why not?"

(3) "Could you give me specific examples of patents you would consider 'business methods'? How are they different from yours?"

I could go on and on. But all this aside, one very important thing to keep in mind is that, while the EU has slipped through business method patents over the years (prohibition notwithstanding), I am not aware of a SINGLE instance where these patents have been actually enforced in EU courts. I've spoken with a number of EU practitioners, and they are unaware of any cases as well. Now, maybe TT is planning to blaze a new litigation path in the EU (Lord knows they may soon have the money to do it). But it's going to be a while before the political climate is right to pull that kind of action.

LAW FIRM BILLING - THE ICEMAN COMETH: Citigroup Private Bank recently conducted a study of law firm finances. The study found that, while billing rate increases accounted for two-thirds of law firms' 2004 revenue gains, they increased at a slower pace than in the prior year, forcing private practice firms to rethink their future growth strategies. Though corporate clients are forever scrutinizing their legal bills and demanding write-offs, law firms by and large have routinely gotten away with 6 percent to 8 percent rate hikes, even in a tepid economy. According to Corporate Counsel however, those days may be finally coming to an end.

In private conversations, general counsel at Fortune 100 outfits readily admit such penny-pinching is quickly set aside in bet-the-company cases. It's the other 99 percent of private-practice lawyers that have tough choices to make, warned the Citigroup study, which was based on the financial performance of 143 law firms across the country and is considered a top indicator of the state of the legal business. For more-run-of-the-mill work like licensing, trademarks and insurance defense, where specialization and prestige play a lesser role in the outcome, cost-cutting pressures will exact the highest toll, according to the study's analysis.

JUDGE DECLARES MISTRIAL IN FINDWHAT.COM PATENT LITIGATION: FindWhat.com, Inc. announced a California jury was unable to reach a verdict in its patent infringement dispute with Overture Services, Inc., a wholly owned subsidiary of Yahoo, and the Court declared a mistrial. FindWhat.com noted the judge has yet to rule on the issue of whether the patent is unenforceable because of inequitable conduct committed by Overture. A hearing on the inequitable conduct issue and other motions that could impact the ultimate outcome of the case is currently scheduled for June 24, 2005.

EBAY PATENT UPDATE: Located the auctions - here and here

UPDATE ON EBAY PATENTS - Apparently, EBay (or the owners) have decided to pull the auctions off the site - no idea what's going on . . .

MOBILE PHONE PATENT PORTFOLIO AUCTION ON EBAY: (From EBay) This unencumbered portfolio of fifteen patents and four pending applications offers an exceptional opportunity for companies in the fields of telephony, dot com, and computers, as well as the financial and service fields. It will work as a defensive patent arsenal, cross licensing material or early protection for a multitude of mobile-related enterprises. The patents also offer numerous possibilities for business expansions into a variety of telephonic areas.

The portfolio was prosecuted by the same team that prosecuted the famous Katz patent telephone computer integration for interactive call processing, which has accounted for record royalties of over $700 million (see the book “JUICE The Creative Fuel That Drives World-Class Inventors”, Evan I. Schwartz, Harvard Business School Press, 2004, beginning at page 320).

The patents cover many functional aspects in the expanding mobile telephone field. There are hundreds of claims in the portfolio with different groups directed both to telephone instruments and to central systems. Individual features of the patents have many applications including: keyless cellular phones, prepaid cellular phones, voice activation, cell phone business locators, voice-data transmission systems, programmable cell phone systems, mobile transaction systems, disposable cell phones, central system cell memory, no-number cell phones, and no battery cell phones.

A listing of the patents, and bidding prices can be found here. Bidding starts at $1 mil, and the auction ends on May 21.

Interestingly enough, they accept PayPal . . .

OTHER EBAY AUCTION: Door Locking/unlocking Phone US. Patent #6,161,005 for Sale for $138 million. Will offer $5 million in commissions (secondary). Auction ends on May 16, and bidding begins at $98 mil.

I'm not familiar with this patent, although the owner seems to have shopped the patent around for a while. The patent also seems to have attracted the derision of the Motley Fool as well. This seems like an astronomical amount of money to me, and the 9% royalty is excessive. Also, if you're seeking $138 mil for ONE patent, you figure one would provide more thorough details on the EBay site. I can't imagine why someone would pay this kind of money for what is essentially unproven technology.

NEW STUDY ISSUED ON 3G CELLULAR STANDARDS: Similar to the study done on open source by OSRM, David Goodman (Polytechnic University, USA) and Robert Myers (Fairfield Resources International, USA), released a study called "Analysis Of Intellectual Property For Third Generation Cellular Technology". It was based on an analysis of 7,796 patents and patent applications declared essential to the practice of third generation cellular technology standardized by two third generation partnership projects: 3GPP and 3GPP2.

The patents are clustered in 887 families, where each family covers one invention. Three quarters of the declared patents are assigned to four companies. A preliminary evaluation of one patent from each family under the study suggests that approximately 21% of the declared patents are actually essential. The paper presents the distributions of patents declared essential and patents judged essential according to technical category and patent ownership.

The paper concludes that a company that creates equipment or services for third generation cellular systems still faces a formidable task obtaining rights to patented technology. Even with the narrow definition of essential and the low ratio of essential patents to declared patents it may be necessary to acquire rights to several dozens of patents.

A copy of the paper can be downloaded here.

KRAFT TO DOUBLE ITS NUMBER OF PATENT LAWYERS: (Chicago Tribune) Worried about the growing ability of private-label competitors to mimic its products, Kraft Foods Inc. is doubling the number of its patent lawyers in a bid to protect its innovations. Speaking at the company's annual investor meeting at its Northfield headquarters, Chief Executive Roger Deromedi said the company's staff of about a dozen patent lawyers would soon be doubled.

Private-label competitors have eaten into market share in core Kraft categories ranging from cheese to crackers to cold cuts. The company has 2,100 worldwide patent families, which relate to each innovation or product, including 1,100 in the U.S. Deromedi said his company, the maker of Oscar Mayer hot dogs, Miracle Whip and Oreo cookies, had looked in detail at how effectively it spent its research and development money. Rather than spend more on research and development, he first wanted to make sure Kraft was focusing on the ideas with the best potential.

MORE DOOM 'N GLOOM ON AMERICA'S TECHNOLOGICAL FUTURE: More bellyaching from BusinessWeek on the lack of "technological leadership" in U.S. culture. I completely agree that we should be placing a greater emphasis on math and science in the schools, but if there is one thing I learned in life, it's that people do what they want to do, and they won't necessarily change because someone else tells them to. Moreover, I am not buying the notion that India and China are going to be running roughshod over us in the next decade, simply because they are producing scientists and engineers en masse. Scientific knowledge is one thing, but practical business application is something else.

Regarding India, people love to focus on the hype surrounding technical outsourcing, but conveniently forget that India is also regarded as having one of the highest illiteracy rates in the world. Combine that with the odious caste system, and the statist economy, and it's hard to imagine how businesses can reasonably prosper. I will concede that India has made great strides in the last decade in progressing its society and economy, but there is a long way to go before India will become a viable force (other than providing cheap labor) in the world economy.

As for China, the communist system and lack of free markets is a huge obstacle. One of the biggest challenges for China is to develop the hard institutional infrastructure of a market economy. The centerpiece of that infrastructure is a rule of law that protects property rights and limits the power of government. Therein lies the difficulty, for the CCP is unlikely to give up its power and let freedom reign. However, forces calling for economic and political change are strong. And the further the market advances, the more costly it will become for the CCP to try to reverse it.

STEP-BY-STEP GUIDE TO GETTING A PATENT, ACCORDING TO WSJ: The Wall Street Journal recently published a short guide for individual inventors that may be contemplating getting a patent. While the article is a bit thin on the details, it provides a decent overview of patenting, and the expectations that go along with the examination process. One of the more interesting statistics contained in the article is a "Reality Check" section that addresses the commercialization of patented products. Two questions posed to inventors revealed some interesting responses:

(1) How many of your inventions generated sales?

None --------------- 42%
1-5 Inventions ------ 36%
> 5 Inventions ------ 3%
Didn't Answer ------- 19%

(2) How many of your inventions generated profits?

None ---------------- 55%
1-5 Inventions ------ 20%
> 5 Invention ------- 2%
Didn't Answer ------- 23%

It would be interesting to see how involved patent counsel were in the commercialization process. While commercialization has traditionally been viewed as a "business decision", I have found that being involved in business strategy for a patented product can greatly improve the chances of obtaining monetary benefit for a client. Patents are often promoted to companies as legal instruments (which they obviously are), but are often neglected as business tools. Patent attorneys are becoming more and more business-savvy every day - cut out your patent counsel from the commercialization process, and you may be cutting out significant chunks of revenue you could be receiving from your products or processes.

INTERMEC POOLS RFID PATENTS: Intermec Technologies Inc. is attempting to simplify licensing agreements for its more than 145 radio-frequency identification (RFID) patents. Using a limited-time-offer approach, between June 1 and Aug. 31 Intermec will sell groups of its patents through four "portfolio families" to makers of RFID tags, readers, and printers.

Intermec previously sold each patent individually. The new approach includes a membership fee and royalties of 2.5% to 7.5%. Specific prices weren't disclosed.

While it has been possible for vendors to design and manufacture previous generations of RFID tags without infringing on Intermec's intellectual property, this appears to be more difficult with the Gen 2 RFID tags. Intermec owns patents for data encryption and increased read capabilities, which are affiliated with the Gen 2 tags.

Gen 2 tags eventually will replace Class-0 and Class-1 protocols. Retailers that have deployed RFID, such as Wal-Mart Stores Inc. and Metro Group AG, have begun testing the Gen 2 technology.

FIRST GOOGLE, NOW AMAZON: Google has gotten quite a bit of press over the last few days over its patent application that ranks news stories according to quality.

Currently the company's search engine throws up thousands of "hits" in response to simple entries such as "Iraq", which lead to news websites. These are ranked either in order of relevance or by date, so that the most recent or most focused appear at the top of the huge list. However, articles that arguably carry more "authority" (e.g., CNN or the BBC) can be omitted from the first page of results, simply because they are not as recent or as relevant to the keyword entered in the search line.

As a result, Google is planning to build a database that will compare the track record and credibility of all news sources around the world, and adjust the ranking of any search results accordingly.

The database will be built by continually monitoring the number of stories from all news sources, along with average story length, number with bylines, and number of cites, along with how long they have been in business. Google's database will also keep track of the number of staff a news source employs, the volume of internet traffic to its website and the number of countries accessing the site. Once the parameters are received, they are weighted according to various formulae, and distilled down to create a single value. This number will then be used to rank the results of any news search.

For whatever reason (I suspect the "sexiness" of being Google is a main consideration), everyone's been buzzing about the application. Of course, the original claims are overly broad - but what elso is new. And there hasn't even been a first examination on the merits.

In the meantime, Amazon.com recently received a patent titled "Method and system for information exchange between users of different web pages." Claim 1 reads as follows:

1. A method in a computer system for exchanging information between users of web sites, the method comprising:

providing a mapping between a first web site and a second web site;

when a first user accesses the first web site, providing a web page of the first web site;

receiving information from the first user; and

storing the received information based on the provided mapping; and

when a second user accesses the second web site, providing a web page of the second web site;

retrieving the stored information based on the provided mapping; and

providing a display of the retrieved information so that the first and second users can exchange information.

Pretty broad stuff. This would seem to cover RSS News Readers, TrackBack, and (oop!) Google News. From the looks of it, this smells like a GIGO examination (garbage-in-garbage-out); there are only two patents cited as prior art, and NO publications cited. There was only one rejection asserted during prosecution before the Notice of Allowance was mailed.

A prime opposition candidate? You bet.

MICROSOFT HOLDS A SPRING CLEARANCE SALE: In an announcement to a gathering of venture capitalists and entrepreneurs, Microsoft Intellectual Property (IP) Ventures is opening its doors to research labs a little and is offering what it says are 'hundreds' of innovations that can be licenced by start ups and venture capitalists.

Unlike IBM however, this IP comes at a price. Microsoft is willing to discuss terms which can be a mixture of royalties or stock options, but says it is flexible enough not to deter the bankers. While IBM initially drew a lot of praise for the move as a sign of its commitment to the open source community, a closer look showed that many of the patents were of little value. Microsoft, by charging money for its IP at least has the incentive to make sure the technologies on offer are worth paying for.

A list of the available IP can be found here.

SOFTWARE PATENTS STRIKE BACK (PART II): In an excellent article in yesterday's TechNewsWorld.com, Heather J. Meeker posted a riposte to the open-source community's bellyaching over software patents. Specifically, she points out that, to date, open-source has a pretty impressive record in avoiding infringement claims in every area of IP. In fact, during the last ten years, very few intellectual property lawsuits have actually been filed relating to open source. The scorecard roughly looks like this:

• Trademark infringement suits: 1 (MySQL-NuSphere)
• Copyright infringement suits: 1/2 (SCO, after modifying the complaint)
• Trade secret infringement suits: 1/2 (SCO, original complaint)
• Patent infringement suits: 0

Why so few cases? Well, there are a couple of reasons:

One, many open-source projects are not-for-profit or marginally profitable. Large distributors of open source, like Novell or Red Hat, would be more profitable targets. But they are also the most likely to defend their position to the hilt, and not capitulate to demand letters.

Second, If damages are not an economically rational objective, that leaves injunctions -- which are attractive only to plaintiffs with competing products. Many open source products essentially have no competition. Those who compete with open source have their own problems. Also, any company that makes such a move risks excommunication from the software community and potentially creates a public relations nightmare. And as for the patent "trolls", they are obviously in it only for the money. If damages are not economically rational to seek, they will not seek them.

Finally, The success of patent lawsuits is tempered by doctrines of patent law like non-obviousness. A patent can be invalidated if the teachings of prior art render the claimed invention obvious. Since all open-source code is publicly available, the more open-source code is published, the fewer valid software patents will issue. This does not necessarily discourage lawsuits, because invalid patents can and do issue. But it makes patent lawsuits less successful.

Heather then offers the following challenge:

So, let's use the lovely technology of the Web to investigate this: Please comment on this article and, instead of explaining in theory why patents stifle innovation, give me examples -- name names, at least to the extent you can. Obviously, an actual patent lawsuit accusing open source would be highly visible and create headlines. What would not create headlines would be the kind of infringement threat that is quietly settled and swept under the rug. That is what I want to hear about. If patents are an immediate danger, I would like to know. But I want to hear facts, not rhetoric. And I also want to hear about the reaction to patent threats. Has the accused code been re-engineered? How long was it off the "shelf"?

So, to both the IP litigators who advise their clients that open source is dangerous, and the open source proponents who say that software patents are dangerous: If you think there is a troll under the bridge, you had better name him. Otherwise, people will think you are telling fairy tales.

Bravo.

EVER WONDER WHAT A DEMAND LETTER FROM ACACIA LOOKS LIKE? Well, here it is in all of its glory. The demand letter (dated September 30, 2004) for the '677 patent, along with a service provider license agreement, was scanned in, so you have to page through the document to read it in its entirety.

It is available courtesy of the Personal Telco Project, which is a volunteer group in Portland, Oregon that believes that "802.11 (wireless networking, or 'Wi-Fi') technology is both cool and empowering." Apparently, Acacia felt that the Hotspots formed by one of its members wasn't "cool" . . .

I haven't analyzed the agreement yet, but I'll try and provide some comments in the days to come. Interestingly, I did notice that the licence has a confidentiality clause - it makes me wonder why they were so eager to post it on their website.

SOFTWARE PATENTS STRIKE BACK (PART I): In the March 2005 publication of the Texas Law Review, professor Ronald Mann, publishes a well-written and long-needed study of the effects of patenting on the software industry, entitled "Do Patents Facilitate Financing in the Software Industry?" The Article is the first part of a wide study of the role of intellectual property in the software industry. Unlike previous papers that focus primarily on software patents—which generally are held by firms that are not software firms—the Article provides a thorough and contextually grounded description of the role that patents play in the software industry itself.

The article reaches some significant conclusions that have been advocated before by this blog, the most significant being that software patents are more beneficial to smaller companies than to larger companies.


The Article emphasizes the difficulties that prerevenue startups face in obtaining any value from patents, since litigation to enforce patents is impractical for those companies. Efforts to obtain patents often divert the company’s focus from the central task of designing and deploying a product, and the benefits of excluding competitors are limited for businesses that cannot themselves exploit the relevant technology. However, once the company starts becoming larger, a number of potential benefits appear. First, despite concerns that patents are not effective to appropriate profits from innovation in the software industry, a substantial number of software startups do have patents of sufficient strength to exclude competitors. That important finding, taken with the fact that the principal targets of those patents are much larger comapnies, suggests patents are more beneficial to small companies than to large companies.

Another important finding in the article is that the concept of patent "thickets" is bunk. It has been advocated by scholars and businesspeople that the enforcement of software patents has hindered innovation in the software industry through creation of a patent “thicket.” These laims were rejected for two broad reasons. First, direct evidence of high R&D spending in the software industry undermines claims that software patents cause firms to reduce R&D spending. Second, the actual structure and practices of the industry belie any claim of a patent thicket. The article shows that the development of young firms in the software industry is not significantly constrained by large patent portfolios in the hands of incumbent firms.

It is a groundbreaking article that I strongly recommend for anyone interested in software patents. The article also provides reasons why copyright protection is an extremely poor substitute for patent protection, and even suggests that patent "trolls" are (gasp!) good for the patent system.

IP AN ELECTION ISSUE? IN THE UK IT IS . . . Two days before the UK's general election, UKIP (UK Independence Party - not UK Intellectual Property ;)) attacked rival political parties for failing to understand the software patent issue, and the damage it claims they could cause.

An emailed statement said: "Software patents stifle innovation, unfairly favour big business, and curtail the rights and freedoms of individual computer programmers. Software patents can be used a tool to restrict freedom of ideas and freedom of expression. As a strong supporter of civil liberties and freedom of speech, this party could never support the introduction of such measures."

Some other notable nuggets from the UKIP include:

"All three major UK political parties have yet to make a stand against the introduction of software patents. They're asleep on the job as our liberties trickle away."

"If the legislation is passed, the only way to prevent the introduction of software patents in the UK would be to leave the European Union — a course of action that only UKIP favours."

Just where do they find these nut jobs in the EU to speak on software patenting issues anyways? Well, at least they didn't feel the compulsion to mention the one-click-patent, like every other article on software patents does . . .

A GREAT IDEA: (Chicago Sun-Times) When businesses face problems, the big guys have their McKinseys, Bains, Kearneys and Booz Allens as their braintrust. But what do the little guys have? Whom can they lean on when there's no way they can pay fancy hourly consulting rates for bright ideas? A genie?

Well, it happens that there really is one.

He's in the form of more than 10,000 current and retired business executives and professionals who are public spirited enough to be the ultimate organ donors: They give away their brains to help struggling enterprises make it.

In Chicago, the chief genie is Larry Pelka, 62, chairman of the local chapter of SCORE, the Service Corps of Retired Executives. Along with his crew of more than 100 volunteer consultants here, he's providing highly experienced (and formerly high-priced) management counseling to more than 5,000 deserving businesses in Cook and Lake counties. His 12-office chapter here is fourth largest among 389 chapters nationwide, coordinated by the Washington D.C. headquarters of this 40-year-old pro bono organization whose partner and supporter is the U.S. Small Business Administration.

And yes - he's got patent attorneys . . .